Cementing a New Normal in U.S.-Myanmar Relations

Aung San Suu Kyi’s visit to the United States on September 13-14 as state counselor and de facto leader of Myanmar will be one of the highlights in U.S.-Myanmar relations since the two countries normalized diplomatic ties in 2012, after the military began political reforms. Now that a democratically elected government has taken office, the next five years will allow the two countries to lay the foundation for a new chapter in their bilateral relations.

Aung San Suu Kyi, having won a popular mandate to govern, faces a monumental task after five decades of repressive military rule and mismanagement. Large swathes of Myanmar’s population expect her government to fix every problem facing the country, from a crumbling infrastructure to near-daily electricity blackouts.

Less than six months since the National League for Democracy (NLD) took office, some critics charge the government with not moving fast enough to address the challenges facing the country. Meanwhile, national-level priorities—establishing peace with ethnic armed groups, developing new economic policies, addressing communal tension between Buddhists and Muslims, and managing Myanmar’s complex relations with neighboring China—will continue to compete for Aung San Suu Kyi’s attention.

Yet Aung San Suu Kyi has a historic opportunity to lay the groundwork for Myanmar’s still embryonic economy to begin to take off, and position Myanmar in regional geopolitics in ways befitting its size and geography. This is where the United States can join as a valued partner of Aung San Suu Kyi and the people of Myanmar.

Now is the time for U.S. officials to think about the trajectory of U.S. engagement with Myanmar for the long term. When the generals embarked on political changes in 2011, they were not “launching” reforms, as was often portrayed in the western media; they were at the finishing end of their self-designed, so-called roadmap to democracy for Myanmar. When the NLD won overwhelmingly at the polls last November, few in Washington took for granted that the military would allow a peaceful power transfer. But it did. The military has since continued to demonstrate its willingness to allow the democratic transition to proceed, so long as its autonomy and interests are taken into account.

As a starter, Washington and Naypyitaw should establish an annual dialogue to serve as a mechanism for senior-level engagement between the two countries on bilateral political-security issues and larger strategic topics. Many current Myanmar government officials are part of the country’s “missing middle,” the generation that came of age during the years of military rule and had little exposure to the outside world. By having an institutionalized channel for high-level dialogue, Washington would gain an important opportunity to boost mutual understanding between officials from both sides and get to know Myanmar’s rising leaders early on.

The U.S. Agency for International Development (USAID), which played a critical role in Myanmar in the lead-up to the 2015 elections, should be empowered further and allocated the resources needed to assist Myanmar’s economic policymaking and development. The agency has launched projects in rural Myanmar to introduce better agricultural technologies and financing to small-scale farmers, a vital effort in a land-rich country where 70 percent of the population works in agriculture. The U.S. government should scale up this endeavor with the long-term goal of helping Myanmar revive its once-thriving agricultural sector.

USAID is also well positioned to work with the current government to help refine its recently released economic vision. The central economic challenge facing Aung San Suu Kyi lies in whether she can put in place the right ingredients for a market economy to take off over the coming decades.

The United States should consider opening a program in Myanmar akin to the hugely successful U.S. Fulbright Economics Teaching Program in Vietnam, which the U.S. government launched in the 1990s to educate mid-level Vietnamese officials on the functioning of a market-oriented economic system.

Likewise, U.S. government agencies should continue to expand technical aid for Myanmar in trade and investment regulations, advancing legal reforms, and building an independent judiciary. The U.S. government should work alongside Aung San Suu Kyi to find practical ways to unwind remaining U.S. economic sanctions against Myanmar and make it easier for U.S. companies to do business in the country. While there are political reasons in the near term for retaining sanctions on cronies and companies on the Treasury Department’s Specially Designated Persons (SDN) list, Washington should take specific steps to ensure U.S. companies are able to use the key physical and business infrastructure (ports, airports, banks, trade-related services) necessary for their operations without fear of being audited or violating U.S. laws. The U.S. government should also work to set realistic benchmarks that would make it possible for Myanmar businesspersons on the SDN list who have reformed their business and social practices to graduate from the sanctions list.

In addition, granting Myanmar access to the Generalized System of Preferences program could lead to investment in light industry and promote continued labor reforms.

Aung San Suu Kyi appears to be more supportive of U.S. engagement with Myanmar’s military than she was in the past. The state counselor earlier this year gave a green light to a U.S. proposal to conduct more structured courses under the U.S. Expanded International Military Training program, often dubbed E-IMET, that aim to foster understanding of and respect for the principle of civilian control of the military. Under the previous government, Washington began limited engagement with the military by conducting workshops with Myanmar officers on issues concerning rule of law and human rights.

Aung San Suu Kyi seems to understand that as long as she holds a decisive say on the pace and scope of the military’s cooperation with Washington, this engagement serves to boost the long-term professionalization of the military, strengthen her position with the generals, and offer Myanmar added strategic leverage in dealing with China.

The U.S. military is considering beginning a small, customized English-language training program for the Myanmar military. This initiative, if it materializes, could help promote a culture of reform within Myanmar’s armed forces and give its future leaders important tools to play a greater role down the road in areas such as peacekeeping and regional security forums.

Aung San Suu Kyi can use her visit to Washington to communicate her latest thinking to members of the U.S. Congress, some of whom still believe Washington has moved too quickly to normalize its engagement with Naypyitaw and could risk losing important leverage to press for additional reforms in the future, particularly with the military.

Lastly, while Aung San Suu Kyi’s leadership provides Washington with an unprecedented opportunity to buttress its engagement with an important country in Southeast Asia, the United States has an interest in seeing the democratic progress achieved in recent years transcend the current government and take a firm hold in Myanmar. A more delicate subject, but one that U.S. diplomats might want to gradually broach with Aung San Suu Kyi, will be the imperative for leadership renewal within the NLD and her vision for making a vibrant, long-lasting democracy in Myanmar a reality.

(Parts of this Commentary have been adapted from the upcoming CSIS report Myanmar’s New Dawn: Opportunities for Aung San Suu Kyi and U.S.-Myanmar Relations, to be released in September 2016.)

Biweekly Update

Myanmar

Opposition lawmakers table motion urging removal of U.S. sanctions. A Union Solidarity and Development Party (USDP) lawmaker on August 15 tabled a proposal backed by other USDP members calling on the government to push for the removal of the remaining U.S. economic sanctions on Myanmar. Lower House Speaker and National League for Democracy (NLD) member Win Myint called a vote on whether the proposal should be discussed further, during which 219 lawmakers voted against and 151 in favor of discussing it, with 16 abstentions. Hla Moe, an NLD representative and secretary of the Lower House’s rights committee, said that lifting sanctions is not a decision for the parliament since U.S. sanctions apply to those blocking the country’s democratic transition. The NLD holds a majority in both houses of the parliament.

Former UN chief Kofi Annan to head international commission on Rakhine issues. State Counselor Aung San Suu Kyi on August 24 announced that former United Nations secretary-general Kofi Annan will lead a nine-person international commission on human rights in Rakhine State. The commission, which is scheduled to hold its first meeting in September, will focus on conflict prevention, reconciliation, aid, human rights, and economic development. This is the first time Myanmar authorities have asked international advisers to weigh in on the politically sensitive communal tensions between the country’s Buddhists and Muslims.

Earthquake in central Myanmar kills 4, damages scores of ancient Buddhist temples. A 6.8-magnitude earthquake struck central Myanmar on August 24, killing at least four people and damaging 187 historic temples and pagodas in Bagan, the ancient capital of Myanmar’s first kingdom. President Htin Kyaw visited the area the following day to inspect damage and to discuss reconstruction efforts with local officials. State Counselor Aung San Suu Kyi has advised the Ministry of Culture and Religious Affairs to refrain from making urgent repairs and to seek technical support from United Nations specialists.

Philippines

Government and communist rebels agree to indefinite cease-fire. The Philippine government and representatives of the communist National Democratic Front of the Philippines on August 26 agreed to an indefinite cease-fire during talks in Oslo, Norway. The Norwegian government, which facilitated the talks, said the two sides signed an agreement urging the Philippine government to grant amnesty to political prisoners captured by Philippine authorities during the long-running communist insurgency in the southern Philippines. The two sides agreed to negotiate an agreement on economic and social issues within the next six months. The Philippine Congress has to approve the amnesty request.

Duterte fires all presidential appointees from previous administration. President Rodrigo Duterte on August 21 instructed all political appointees from the previous Benigno Aquino administration to submit their resignations within seven days. Career officials and cabinet secretaries, as well as political appointees installed by Duterte, are exempted from the order. The new directive is the latest measure in Duterte’s campaign to tackle corruption and waste in the government. Duterte has vowed to eliminate corrupt police officers involved in the drug trade and oligarchs as part of his anti-graft efforts.

Police chief defends war on drugs; Duterte slams UN over criticisms of extrajudicial killings. Police chief Ronald dela Rosa on August 23 presented a report on the government’s anti-drug campaign during a Senate hearing and defended the police’s record against allegations of summary executions of drug suspects. According to the report, more than 1,900 have been killed as part of the war on drugs since President Rodrigo Duterte took office in July. Duterte on August 17 accused the United Nations of “interference” in Philippine affairs in response to its criticisms of his government’s extrajudicial killings.

Indonesia

Finance minister targets tax evasion in effort to boost government revenue. Newly appointed finance minister Sri Mulyani Indrawati said the government will target tax evaders as part of its ongoing tax amnesty program to boost government revenue that could be allocated to planned infrastructure projects, according to an interview in the August 21 Wall Street Journal. The tax program, scheduled to run until March 2017, is designed to encourage more businesses and wealthy Indonesians to participate in the formal economy. Sri Mulyani had pushed for greater compliance with tax laws during her previous tenure as Indonesia’s finance minister from 2005 to 2010.

Indonesia sinks 60 foreign fishing vessels to mark Independence Day. Indonesia on August 17 sank 60 impounded foreign fishing vessels to mark its 71st Independence Day. Maritime Affairs and Fisheries Minister Susi Pudjiastuti said during her Independence Day remarks that the move is part of Indonesia’s effort to exercise sovereignty over its maritime territory and resources. Unlike in previous boat-sinking events, officials blocked media coverage of the ceremony and have declined to reveal the vessels’ countries of origin.

Government to form interagency counterterrorism task force; 13th economic package released. National Counterterrorism Agency (BNPT) chief Commander General Suhardi Alius on August 22 said the government plans to establish a joint task force across various ministries to better combat the spread of Islamic radicalism. The BNPT will lead the development of counterterrorism programs under the planned task force. Separately, the government on August 24 released its 13th economic stimulus package designed to make housing more affordable for low-income citizens by simplifying building procedures.

Malaysia

Authorities say Malaysian submarines “unaffected” by Scorpene data leak. A data leak from French defense contractor DCNS “will not affect” the Scorpene-class submarines DCNS supplied to the Malaysian navy, according to an August 24 Free Malaysia Today interview with Admiral Ahmad Kamarulzaman Ahmad Badaruddin. The navy chief explained that Malaysia’s submarines exhibit different features and capabilities from the compromised Indian submarines. The data leak, first reported by The Australian, comprised 22,400 pages with detailed information about the Indian Scorpene’s sensors, communications, navigation, and weapons systems.

Malaysia, Vietnam navies to boost cooperation in sea patrols, personnel training. The heads of the Malaysian and Vietnamese navies on August 8 agreed to further strengthen naval cooperation between the two countries during Malaysian navy chief Admiral Ahmad Kamarulzaman Ahmad Badaruddin’s visit to Vietnam. Ahmad Kamarulzaman and his Vietnamese host, Rear Admiral Pham Hoai Nam, discussed the need for increased bilateral communications, joint sea patrols, and stepped-up training exchanges. Malaysia and Vietnam had earlier agreed to establish joint naval patrols and a hotline between the two countries’ navies.

Cabinet to discuss proposed amendment to religious conversion law. Prime Minister Najib Razak on August 25 announced that the government will introduce a bill in October to amend the Law Reform (Marriage and Divorce) Act 1976. The revision would establish the precedence of civil courts over divorce and child custody cases for spouses that convert to Islam after marriage. The announcement followed Najib’s earlier announcement in May that he was searching for solutions to resolve interfaith child custody conflicts.

Singapore

Former president Nathan dies. Former president of Singapore S. R. Nathan died on August 22 following a stroke three weeks earlier. Nathan was the sixth and longest-serving president of Singapore, holding the largely ceremonial office from 1999 to 2011. His time in government included positions in the Ministry of Home Affairs, the Ministry of Defense, and the Ministry of Foreign Affairs, including an ambassadorship to the United States. Singapore held a state funeral on August 26. Nathan was 92 years old.

U.S. Air Force chief visits Singapore. U.S. secretary of the Air Force Deborah Lee James visited Singapore from August 23 to 25 as part of a regional tour that also took her to India, Indonesia, and the Philippines. She met with Defense Minister Ng Eng Hen and discussed the bilateral defense relationship and future U.S.-Singapore defense cooperation, including the training of Singapore air force pilots with U.S. forces. She also visited Paya Lebar Air Base, a facility used by U.S. forces since late 2015 to conduct quarterly P-8 patrol flights over the South China Sea.

Prime minister says Singapore will change rules to ensure presidency for ethnic minorities. Prime Minister Lee Hsien Loong on August 21 said that the presidency is a unifying symbol for all Singaporeans and emphasized the importance of having a person of non-Chinese origin as president. Lee said that having a Chinese president for long periods may threaten the sense of national identity among minority ethnic groups. Citizens of Chinese ancestry form majorities in all of Singapore’s constituencies, despite sizable ethnic Malay and Indian populations.

Vietnam

Two local party chiefs shot dead in northern Vietnam. Pham Duy Cuong and Ngo Ngoc Tuan, the Communist Party secretary and chairman of Yen Bai Province, respectively, were shot dead on August 18 by Do Cuong Minh, head of the provincial Forest Ranger Office. The perpetrator then shot himself at the scene and later died in a hospital. Investigating authorities have not yet identified a motive. Deadly shootings are rare in Vietnam due to the country’s restrictive gun laws.

PetroVietnam inks deal to supply drilling rig for Total’s Myanmar operations. PetroVietnam Drilling (PV Drilling), a subsidiary of state-owned energy firm PetroVietnam, on August 19 agreed to supply a drilling rig and services for a 164-day operation off the coast of southern Myanmar by Total E&P Myanmar Ltd., a subsidiary of France’s Total S.A. Under the deal, PV Drilling will provide a rig for drilling activities beginning in October in the Yadana gas field, which supplies half of the gas consumed by Myanmar.

Government approves plan to upgrade Haiphong port into international gateway by 2020. The Ministry of Transport plans to turn the northern city of Haiphong into an international gateway by 2020 through administrative reforms and public-private investment partnerships, according to an August 22 report by the Vietnam News. The ministry has set a target of 25,800 foreign tourist arrivals and up to 114 million tons of goods flowing through Haiphong’s ports over the next four years. The plan is part of the government’s initiative to boost traffic in Vietnam’s northern economic triangle connecting Hanoi and Haiphong to Quang Ninh Province.

Thailand

Police say at least 20 trained suspects conducted August 12 bombings. Police chief Chakthip Chaijinda on August 22 said that at least 20 trained suspects, primarily Muslims from southern Thailand, took part in the August 11-12 bombings across resort towns in southern Thailand. Most of the suspects are unknown to the police, but some were linked to previous attacks in the three southern provinces of Thailand. The wave of bombings killed four and injured dozens. On August 23, three bombings occurred in Pattani Province in the far south, killing one and injuring 29.

True Corp to invest over $570 million in digital hub facility. True Corp on August 18 announced that it would invest over $570 million to develop True Digital Park on Sukhumvit Soi 101 in eastern Bangkok as part of the government’s “Thailand 4.0” plan to become a regional hub for digital innovation. The park will provide digital service platforms, including cloud, e-commerce, and e-payment systems, in addition to using the open innovation concept to create an ecosystem for digital innovation.

Cabinet supports high-speed railway project with China. Cabinet officials on August 23 approved the cooperative framework agreement between the Thai and Chinese governments to develop a dual-track high-speed railway connecting Bangkok and Map Ta Phut near the Gulf of Thailand to Nong Khai along the border with Laos. Thailand will retain ownership rights of the project. Prime Minister Prayuth Chan-o-cha instructed authorities to expedite the project so that construction could begin this year. Earlier efforts to negotiate the project had bogged down over the terms of project financing.

Cambodia

Cambodian opposition to hold public policy forums ahead of 2017 elections. The opposition Cambodia National Rescue Party (CNRP) on August 15 announced plans to hold public policy forums every Monday, Wednesday, and Friday at its headquarters in Phnom Penh in an attempt to engage voters ahead of the 2017 commune elections. The forums are also intended to address criticism that the party neglects policymaking. The opposition said the forums allow voters to ask CNRP representatives questions about the upcoming elections and the party’s stance on various policy issues.

National Assembly rejects opposition’s proposed changes to judiciary laws. The National Assembly on August 23 rejected amendments to the country’s judiciary laws proposed by the opposition Cambodia National Rescue Party (CNRP), citing incorrect submission procedures. The amendments target three laws that were unanimously passed in 2014 while the CNRP boycotted Parliament and that have been widely criticized for allowing Prime Minister Hun Sen’s government effective control over the judiciary. The CNRP later resubmitted the proposed changes in compliance with parliamentary requirements.

South China Sea

China says wants to finish framework on South China Sea code of conduct by mid-2017. China and ASEAN on August 16 agreed to complete a framework for a binding Code of Conduct for the South China Sea by mid-2017. Meetingin the Inner Mongolia autonomous region in northern China, officials from China and ASEAN member states approved guidelines for a China-ASEAN hotline in maritime emergencies and agreed to apply the Code for Unplanned Encounters at Sea, a 2014 maritime agreement by 21 Pacific countries to reduce the chance of incidents at sea, to military vessels in the South China Sea. Discussions on the Code of Conduct have seen little progress for the last decade.

Duterte says talks with China can start "within the year," will not raise Hague ruling at EAS. Philippine president Rodrigo Duterte on August 23 said that Manila will start negotiations with Beijing on the two countries’ South China Sea dispute “within the year,” and that he will not press China to comply immediately with the Permanent Court of Arbitration tribunal ruling rejecting China’s nine-dash line. Duterte previously said that unlike his predecessor, Benigno Aquino, he will not raise the South China Sea issue at regional forums, including the upcoming ASEAN and East Asia Summits in Laos.

Singapore prime minister calls for principled stand on South China Sea despite external pressure. Prime Minister Lee Hsien Loong on August 21 said in his National Day Rally speech that Singapore will resist any pressure to take sides in the long-running South China Sea territorial disputes. Lee said that despite lacking claims in the area, Singapore benefits from the maintenance of international law, freedom of navigation, and an ASEAN united over the South China Sea question. While Singapore is a longstanding U.S. partner, Lee stressed that friendly cooperation with China is also vital to Singapore’s growth.

Philippines receives first of 10 patrol vessels from Japan. The Philippine Coast Guard on August 18 received the first of 10 patrol vessels built and funded by Japan through a $158 million assistance loan. The loan aims to help Manila boost its maritime capabilities amid a dispute with Beijing in the South China Sea. The vessel is likely to be used for patrol missions in the contested waters. Japan and the Philippines have long-running disputes with China over claims in the East and South China Seas, respectively.

ASEAN

U.S. holds annual SEACAT exercise with Southeast Asian navies, coast guards. The navies of the United States, Bangladesh, and seven Southeast Asian countries recently held the 15th iteration of the annual Southeast Asia Cooperation and Training (SEACAT) exercise in Singapore. The five-day exercise, from August 22 to 27, involved mock reports of suspect vessels at sea, in response to which participating countries practiced information sharing and created response plans in a concurrent field training exercise. Coast guard forces from Bangladesh, Indonesia, Malaysia, the Philippines, and the United States also participated in this year’s SEACAT.

Cambodia wants removal of South China Sea reference in upcoming ASEAN statement. Cambodia on August 23 announced that it will ask ASEAN to drop a reference to the South China Sea dispute from an upcoming joint statement to be issued at ASEAN’s September summit in Vientiane, Laos. A spokesman for the National Assembly said that Cambodia, a non-claimant in the South China Sea, had no interest in the dispute and that regional claimants should negotiate directly with Beijing. Cambodian support for China was blamed for ASEAN’s failures to issue a joint statement addressing the subject at the ASEAN summit in Phnom Penh in 2012 and the China-ASEAN meeting in Kunming in 2016.